Companies switch production from local to export sales

EXPORTERS HAVE undeniably benefited from the rand's low levels with many Cape companies taking a policy decision to switch upward of 50% of production from local to export sales. "Countries that have performed well in global terms recently have always achieved that on the strength of an export culture and quite often success came by way of a slightly undervalued currency, so while the rand is undervalued for now it is perhaps not a bad thing for our economy," says the Cape Chamber's Albert Schuitmaker. "On the other hand the import component of production will go up and it is here that importers need to become creative in assessing whether there may be alternatives to imports, perhaps locally produced, or by utilising different methods of making a product." The Western Cape has traditionally performed at one percent better than the rest of the economy in terms of growth, a major reason being that it has no minerals and therefore is not susceptible to global prices. That growth rate was somewhat retarded last year due to drought but Schuitmaker is optimistic that with good recent rain and a strong agricultural showing the province could again attain growth of 3,5% or possibly 4% this year, in contrast with Finance Minister Trevor Manuel's probable projection of 2,9% or 3% for the rest of the country in his February 20 Budget speech to Parliament.